Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on October 29, 2008

Locking Stance:  LOCKING     Mortgage Bonds:  +44bp

You may be wondering why on earth I am still in a locking stance with mortgage backed securities up 44 basis points.  I will get into that shortly, but I also want to say you can cautiously float right now, but be ready for a quick reversal if you do.

Over the last several trading days, bonds have been getting beat up, or rather beaten down.  That means, as I mentioned yesterday, a retracement of sorts would have to take place and I even mentioned it could happen today.  We have now bounced off our October lows, but that does not mean we are out of the woods yet, especially with the Feds’ decision facing us this afternoon.

As far as data is concerned, Durable Goods Orders blew away expectations, coming in at 0.8% versus an expected -0.1%.  Oil is also higher right now and that means stocks will likely go higher at the opening.  Crude Inventories are due out at 10am, so it could affect the markets a little as well.  All of that pales in comparison to this afternoon’s Fed decision and the potential impact on the markets from that result.  Most are expecting a 0.50% cut, bringing the Fed Funds Rate down to 1.00% even.

Once again, may I remind you that a cut in the Fed Funds Rate does not directly affect Florida Mortgage Rates.  How mortgage backed securities react to the decision is what affects mortgage rates and that means mortgage rates usually move in the opposite direction.  Of course, trading these days is not typical, so any direction is fair play right now, though the odds are for Florida Mortgage Rates to resume their climb higher in the near future.

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